BookShout pulls users’ Kindle, Nook books onto other platforms

BookShout, which is backed by book distribution company Ingram Content Group’s CEO John R. Ingram and has gone through a number of iterations since its founding in 2010, is doing something that may make Amazon (s AMZN) and Barnes & Noble (s BKS) mad: It is importing books that customers have purchased on Nook and Kindle into its own Android (s GOOG), iOS (s AAPL) and web apps. The news was announced at the Frankfurt Book Fair.

The Dallas-based startup is doing this with the support of large publishers. The startup has already signed deals with Random House, HarperCollins, Macmillan and Wiley, and is “finalizing” agreements with Simon & Schuster, Penguin and Hachette, along with other publishers. Ingram’s publisher clients can sign up directly or through Ingram.

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A login workaround — not breaking DRM

BookShout founder and CEO Jason Illian explained to me — sort of — how the process works. The company’s app doesn’t break DRM on Nook or Kindle books. Rather, Ilian compared BookShout’s model to personal finance site Mint, which imports transactions from users’ bank accounts. Neither Mint nor BookShout relies on APIs (Amazon and Barnes & Noble don’t make their APIs public). Rather, to import books to BookShout users log in to the app with their Amazon or Barnes & Noble user name and password. The app verifies their purchases and then — if a consumer has bought a Kindle or Nook book from one of the publishers that BookShout works with — lets the user access the publisher’s version of the file through the app. These publisher files are protected by DRM.

The advantage for readers is supposed to be the ability to integrate their ebooks with BookShout’s social reading capabilities — a goal that many startups have focused on, though it’s unclear that many readers actually desire these features.

The advantage for participating publishers, Illian says, is more data about their readers: “We want to be able to give information back to the publishers on how people are reading, where they’re shopping, what they’re sharing.” The Kindle and Nook book importing, though, doesn’t actually provide publishers with much information about their readers other than which platform they’ve bought a book on. Rather, BookShout’s hope is that publishers will choose to run promotions and let their authors interact with readers through the BookShout platform. BookShout is also selling ebooks directly — through its website, not its apps — and takes a cut of those sales. So far, most of the titles on BookShout’s website are Christian and religious titles from Thomas Nelson, which is now owned by HarperCollins.

“They said it was impossible”

It seems like only a matter of time before Amazon and Barnes & Noble shut down BookShout’s import function. “I think they’ll find us,” Illian told me, smiling. “I’ll be interested to see what Amazon thinks. My argument to them is, one, we’re not taking your sales, and, two, we’re not breaking any terms of service because we’re not taking any files from you. Will they try to shut it down? Maybe. Amazon is notorious for protecting their ecosystem. We’ll see how they react.”

What about Barnes & Noble? Illian leaned in close. “What do you think Barnes & Noble would do to have our technology?” he asked.

BookShout is ambitious — “They said it was impossible to import your books from Amazon and Barnes & Noble,” Illian bragged at Tools of Change Frankfurt Tuesday evening — but when I tested the import function through its iPad app (the function is not yet available on the BookShout website), it didn’t work at all for Kindle books. (I asked Illian about the problem in a follow-up email and was told that other users had been able to successfully import Kindle titles; as of this writing, BookShout was working to address my problem. but I wonder if Amazon has already moved to shut the function down.) The app appeared to login to my Amazon account successfully, but then I got a message saying “No books could be found to import.” (There are over 70 books in my Kindle account, including many from the publishers that BookShout says it is working with.)

The app was able to login to my Barnes & Noble account and showed the purchases I’ve made there, but because none of those purchases were titles from publishers working with BookShout, I couldn’t access them.

Good job, BookShout. Im my opinion, for Amazon Instant Video and Apple iTunes store, anyone who act a pioneer in make all the contents DRM-free will beat its rival completely. Currently, many consumers pirate their protected purchases with a DRM removal program (guide on remove DRM from Amazon video http://dig4u.org/rip-drm/bypass-drm-of-amazon-video-on-demand.html ), so why not sell the DRM-free version to persuade the consumers?

He confirmed my assumption that there’s really no security risk involved in importing your books into BookShout. He also pointed out the same thing when I took a closer look at my own account: Amazon only shows the last 4 digits of your credit card number. IOW, you could have someone’s Amazon log-in credentials and still be unable to grab their credit card number (other than the last 4 digits).

Good questions….all of them. I’ll try to add a little more clarity for you:

At BookShout, we do not store your Amazon or B&N password when you import your books. In fact, if you import your books, buy another book from Amazon and then want to import the new one, you have to enter it all over again. An Amazon account can only be imported into one BookShout account. In other words a user cannot import the same Amazon account into multiple accounts. The only data that we capture during the import process is your current Amazon or B&N book list.

As Amazon will tell you, they have one of the most sophisticated encryption and credit card protection technologies in the world, which is why they are such a massively successful retailer. If it was as easy to steal someone’s credit card as just getting their username and password, then they couldn’t stay in business. At best, if someone has your info they could see the last 4 digits on your cards and/or order some stuff to be shipped to your house. Amazon would be the first to tell you that your personal financial data is safe with them, and I concur.

I do think the Mint comparison is a good one. Remember, Mint wasn’t always owned by Intuit. In fact, it had a strong user base long before it was acquired. And they aren’t just asking you for a retailers information–they are asking you for your personal banking information. The reason most of us don’t hesitate is (1) because we are comfortable that the masses are doing it and (2) the precedent has already been established that this type of aggregation is safe. We, as a publishing industry, haven’t achieved this level of comfort yet. We at BookShout are trying to change that. In a couple years, we believe that shifting digital books from one reader to another will be commonplace.

So who are we? We are a young company, certainly not as established as Amazon or B&N. But we have been vetted by a number of the Big 6 publishers and they are trusting us with their content. And the process of creating legitimate DRM, protected servers for ePubs, appropriate reporting for the world’s largest publishers, and PCI compliant systems is no easy task–which we have accomplished. We also have raised millions in financing to help us create a better user experience for you, the reader. And if we get acquired, which we have no idea when or how it would happen, the company still does not have your Amazon login or password–we don’t store it. Believe me, we know it is our burden to earn your trust. That is what we are trying to do.

Appreciate your continued support and patience as we grow. Please don’t hesitate to let us know how we can better serve you.

Do people usually hand out their credit card numbers to strangers? That’s what BookShout is asking you to do. If I hand them my Amazon account info, they can access my credit cards. I have a problem with a company that does this. It’s acclimating users to doing things that are insane from a security perspective.

“Ilian compared BookShoutâ€™s model to personal finance site Mint, which imports transactions from usersâ€™ bank accounts.”
But Mint is owned by Intuit, a company with a lot at stake (capital and reputation). Users probably can feel pretty sure Intuit understands PCI compliance and has every incentive to keep their logins safe.

These Bookshout folks, on the other hand…who are they? Why would you give them your login at the world’s biggest online store? And what happens if Bookshout does get acquired, as it sounds like they’re hoping? Who’s got your Amazon and Nook logins then?

I guess the ultimate app would combine the multiple platform purchasing capability of Ganxy with the seamless conversion promised by Bookshout in one app, running by script after pressing one button. The “information” Bookshout pitches as a benefit to publishers is, I am assuming, all qualitative? That’s a specious offer: imagine the labor costs needed to evaluate that on a mass scale — its not like its a select focus group. Overall, however, this product seems to have more consumer value than Ganxy.
But to Ms. Owen’s point about the market demand for social reading features, there seems to be at least four companies pursuing this tact (ReadSocial, BookShout, & 2 others?). Is there any study being conducted by non-startup firms to assess the demand?